Juan Pablo Guzmán Cobián
Minister
Ministry of Economy of Oaxaca
/
Expert Contributor

Interoceanic Corridor: More than a Railway

By Juan Pablo Guzmán Cobián | Mon, 07/27/2020 - 08:55

To talk about the economic dynamics of Oaxaca and its exportable offer, is also to talk about its history, its riches and the complexities that make it a unique entity.

Mexico (Oaxaca), Nicaragua and Panama have a privileged location when placing themselves in the "isthmus" of Latin America. The three countries are located in a “territorial neck” that due to its narrowness allows the connecting of the oceans that surround them, speeding up the movement of goods to Europe, Asia and the US.

In the coming articles, I will discuss a highly ambitious project that will gradually close the inequality gap that exists between the south and north of Mexico: the Interoceanic Corridor, which will connect through a 309km railway network, the Atlantic and Pacific oceans, decreasing from seven to four hours the transfer time between Salina Cruz and Coatzacoalcos, the shortest interoceanic highway on the continent, in addition to the Panama Canal.

The construction of this train will reduce rail transfer to four hours. In the Panama Canal, merchandise currently takes eight hours to cross from one ocean to another and waiting for one shift can take up to 15 days.

The Interoceanic Corridor is, without a doubt, the most ambitious project of the administration of Gov. Alejandro Murat Hinojosa, with a total investment of MX$20 billion. It will be developed over a surface area of 36,000 square kilometers.

But the Interoceanic is much more than a railway. It is a regional development policy whose social and economic impact will be reflected in the entire south-southeast area of Mexico, benefiting 1.2 million inhabitants located in 788 urban locations, of whom 11,000 are indigenous households and 104,000 live in conditions of high or very high marginalization.

The Isthmus of Tehuantepec has various competitive advantages, such as its strategic location, it is an entry point to the south-southeast of the country and offers aquifer, energy, and territorial resources and is an access route to internal and external markets.

This noble region is key to overcoming the lack of economic and social development of the southeast, and also to improving the well-being of the people and igniting its economic potential. Therefore, an unprecedented investment in infrastructure will be allocated to create nine well-being poles, identified by their productive vocation. Indigenous communities and peoples, whose opinion and interaction are indispensable for the development of the Interoceanic Corridor, will be included.

Free zones will be created along the Isthmus of Tehuantepec, which will be the axis of this multimodal corridor. In free zones, goods are considered outside the National Customs Territory, with the aim of attracting new investments and foreign capital, since they are areas with tax incentives that provide new companies with all the facilities to settle.

It is not the first time that the Interoceanic Corridor has been planned, but yes, it is the first time that it is receiving a powerful boost for its operation. It is estimated to start operating in 2024. This project has been long desired, initially, by 79 municipalities of the Isthmus Tehuantepec and Coatzacoalcos, which will directly receive the economic spillover and that will configure the free zone with the largest number of municipalities involved.

Mexico, has free trade agreements with 13 countries. In my next article for Mexico Business News, I will elaborate the history of the railway in this area of the country, starting with the first shipment made on Jan. 27, 1907, when then President Porfirio Díaz inaugurated the Trans-isthmic Corridor with a shipment of sugar from Hawaii, with a final destination in Philadelphia, and touching on the productive vocation of this area of Mexico and the powerful Oaxacan export offer.